Could mobile phones soon replace credit and debit cards as the preferred payment method for millions of Brits? Mobile wallets are set to grow in popularity after the first service that allows consumers to pay for goods using a mobile phone was launched in the UK in May.
How do mobile wallets work?
Mobile wallets work thanks to new technology called ‘near field communication’ (NFC) – a system of short range wireless technology. Users wanting to pay for goods using their mobile phone will need a Barclaycard and Orange account as well as an enabled handset, such as the Samsung Tocco Lite.
Users can preload their mobile phone with cash (typically up to £100) and then use a contactless payment system (nicknamed Quick Tap) to pay for goods and services up to the value of around £15. Several retailers have already signed up to the system including Subway, Wilkinson, McDonalds, Boots, Prêt a Manger, Little Chef, Eat and the National Trust.
David Chan, chief executive of Barclaycard Consumer, said: “Having a wallet on my phone has made it much more convenient to make purchases on the move and I like that it allows me to keep track of what I’m spending as I go.”
Pippa Dunn, vice president of Orange agrees that the technology will have huge benefits. She said: “It is going to start a revolution in the way we pay for things on the high street.”
Exclusive deals on credit cards and mobile wallets
One of the big advantages for mobile phone companies and handset providers of the mobile wallets system is that it allows them to target consumers with ‘local offers’.
When customers use their GPS-enabled mobile phones to pay for goods and services using the Quick Tap system, companies can easily target them with special offer vouchers and coupons. The system allows very careful targeting of individuals with offers based on where they shop or where they eat.
Alternatives to mobile wallets
If you’re not keen to pay for goods and services using your mobile phone, or your handset is not enabled for the Quick Tap system, there are other simple payment options that you can consider.
There are plenty of easy to get debit and credit cards available in the market currently, many of which don’t even involve a credit score. Prepaid debit and credit cards are particularly popular as they offer many of the benefits of traditional credit cards without the interest charges or credit checks. You load cash on to your prepaid card and you then use it to pay for goods or services, or to withdraw cash from an ATM.
Other easy to get credit cards include Visa and MasterCard products for applicants with a less than perfect credit history. While these cards might charge a higher interest rate than other credit cards, they will allow you to make simple purchases online or on the High Street.